National able to form a government

National now officially has enough support to form a Government after signing deals with Act and United Future.

Confidence and supply agreements with both the one-MP parties were announced today, topping up National's 60 seats to a majority.

The deals include ministerial roles outside Cabinet for both Act's John Banks and United Future's Peter Dunne, and a number of policy commitments with each party.

Mr Banks received former leader Rodney Hide's regulatory reform portfolio, and also picked up minister for small business, associate minister of education, and associate minister of commerce.

Act had a number of policy wins in the agreement, including legislating Crown spending limits, looking at Resource Management Act reform and extending measures to get beneficiaries into jobs by contracting out services to the private sector and community organisations.

National also agreed to introduce charter schools in areas where there is continuing educational underachievement.

The schools are state-funded but run by private groups. They will set their own teaching practices and pay teachers according to performance, in exchange for setting specific achievement targets in their charters.

National and Act both said the country's current financial problems were caused by irresponsible Government spending between 2005 and 2008, and that they would amend the Public Finance Act to prevent the situation arising again.

They agreed to legislate in the next two years to make spending on core Crown operations, the unemployment benefit, asset impairments, and natural disasters subject to a limit.

Earlier this afternoon, Prime Minister John Key announced the deal with Mr Dunne, under which the United Future leader retained his positions as revenue minister and associate health minister, and also picked up associate minister of conservation.

Among the policies National agreed to support, in return for United Future's commitment, are that there be no sale of any part of Kiwibank or Radio New Zealand, and that statutory limits of 49 per cent be introduced for sales on any public assets.

National also agreed to maintain at least the current budget funding for Radio NZ and Television New Zealand.

The parties agreed that prisoners appearing before the Parole Board will all receive pre-release alcohol and drug dependency assessments, and the Government will look at cross-agency co-operation for developing and establishing 'Youth One Stop Shops' to provide services for at-risk youth.

The Families Commission, which was set up by Mr Dunne, will also change under the new agreement. A Families Status Report is to be introduced to assess how families are getting on, and the Government will redirect $4 million over four years to fund extra parenting programmes and relationship education in secondary schools.

A key part of United Future's retirement policy included "Flexi-Superannuation'', and National agreed that a discussion document would be developed to look at the issue.

A number of other aspects of the agreement included provisions that were also made in United Future's 2008 agreement with National, including a continued development of the long-term medicines' strategy and reducing elective surgery waiting lists.

Mr Dunne described today's deal as "very substantial''.

"I believe New Zealanders will look at this agreement and see great value in many, if not all, of the items United Future has negotiated,'' he said.